Public sector spending

The recession is doggedly continuing and the character of the upturn, in speed and extent, is very uncertain. Modelling the future, given the variables, is difficult, but latest analysis from CIPFA of public sector finances predicts a contraction of expenditure of between 7.5% and 15% in the next spending round from 2011 to 2014. Factor in the politicial protection of some areas of spending, notably the NHS and schools, and the effect on many other local services will be deep. The localist argument that we made in benign times is now a) even more important and b) even more complex. A major rethink of the design of public services is unavoidable, whether or not you consider it desirable. Overall, it is likely that public services will go the way of the private sector in recession: consolidation, combination, collaboration, cuts. Examples like regional fire control rooms, investment in larger hospitals serving wider areas, will provide some learning. Many councils are already dabbling in joint procurement and joint commissioning, both with neighbouring authorities and with other parts of the public sector. In a relative sense, to what is to come, the current practice and experience is limited. There is a very real choice facing local public service leaders: to think big and act boldly locally, or wait for central government to impose change. The LGiU strongly believes that it will be best for communities if the redesign of public service provision is led locally. The future hangs in the balance.